The microstructure and mechanical properties of Ni56Fe17Ga27-xCox(x=0, 2, 4, 6) magnetic shape memory alloys have been studied, and the influence of Co addition on γ phase and the mechanism for increasing toughness by γ phase were revealed. The results show that the microstructure of as-melted alloys is composed of martensite phase and γ phase at room temperature. With increasing Co content, the volume of γ phase increases. For the martensite phase, the saturation solubility of Fe and Co atoms is fixed. If the total content of Fe and Co atoms exceeds 16 at %, the residual atoms will exist in the form of γ phase, which is rich in Fe and Co atoms. Besides, the saturation solubility of Fe and Co atoms in γ phase is around 23 at %. The tensile tests show that the yielding strength and fracture strength increase with increasing Co content. The fracture mechanism of martensite phase is transcrystalline fracture, and the γ phase is gliding fracture, it proves that the γ phase improves the toughness of experimental alloys